24 August, 2010

The Wall Street Journalreported this week that the Indian government has agreed to a series of wage hikes for local members of Parliament (MP), a step which some governance experts are touting as the first step toward reducing the level of corruption in government. Of course, others suspect that the MPs will simply take the higher wages and continue to accept "gratuities" on the side. Only time will tell who's correct, I suppose.

To be fair, countries with low levels of corruption, such as Singapore, often cite the high pay received by civil servants as the primary reason for their well-functioning, transparent governments. Indeed, according to Transparency International's "Corruption Perceptions Index," Singapore is one of the least-corrupt countries in the world, trailing only Denmark and New Zealand. India, for the record, is ranked 84th in the world.

"Why should we take bribes?" a Singaporean civil servant will ask. "Our salaries are already higher than anyone in the private sector."

And maybe it's true: perhaps higher salaries and better benefit packages do lessen the temptation to seek out bribes.

But so what?

Civil servants and politicians receive their salaries from the public purse, which is funded by taxpayer dollars. Thus, to pay these folks more, the government must take, by force, more money from other citizens' pockets. After all, taxes are always collected under the implicit threat of force: if you don't pay, you can be thrown in the clink and have your property confiscated. So even if we assume that higher salaries may reduce government corruption, it would only happen because citizens are being forced to, in effect, bribe civil servants and politicians to not take bribes.

Theoretically, I can imagine a scenario in which, assuming higher pay produces lower corruption, a nation would still benefit from "bribing" civil servants to behave themselves. For example, the ministry in charge of choosing contractors for public infrastructure projects might be more likely to choose the most competent, efficient contractor instead of the company willing to slide the most cash under the table, thus avoiding, say, a bridge collapse that kills hundreds of people. In this case, perhaps the citizenry would benefit by paying more taxes in order to reduce the amount of bureaucratic monkey business. Then again, this is almost a dictionary definition of extortion: pay me more money, or else watch your bridge take a swim.

Truth be told, I haven't studied corruption in any detail, and thus can't offer much aside from skepticism on this matter. What is it that makes New Zealand and Denmark less corrupt than, say, Belgium or the United States? I wish I knew.